New Missouri law requires faster insurance payments

■ Health plans in the state must pay or deny claims within 45 days or be penalized.

Missouri Governor Jay Nixon has signed into law a bill that requires health insurance companies in the state to speed up claims payments to doctors, hospitals and other health care professionals.

The bill, which takes effect Jan. 1, 2011, requires insurers either to pay or deny claims within 45 days of receiving them. Plans that don't act within that time frame will pay a daily penalty to the affected physician amounting to 1% of the value of the outstanding claim.

A 2009 report from the Missouri Dept. of Insurance showed that physicians across the state were dealing with significant payment delays on insurance claims. The department concluded that a Missouri prompt-pay statute, which took effect in 2002, "has had only a modest impact on claims processing times, and that substantial amounts owed to medical providers remain unpaid for extended periods of time."

The report also indicated that large volumes of claims were being held "in a sort of legal purgatory" due to insurers suspending claims, meaning they neither approved nor denied them. "This provision appears to be unique to Missouri, and was originally included to afford insurers additional time to investigate unusual or suspect claims, such as instances of suspected fraud," the Insurance Dept. report stated.

The new law signed by Nixon on April 27 eliminates insurers' ability to suspend claims, which is welcome news to the Missouri State Medical Assn., said Tom Holloway, MSMA's director of government relations. "For all practices, whether they're large or small, cash flow is vitally important."

Nixon said the bill clearly spells out responsibilities for filing claims and gives both physicians and insurers a clear definition of a clean claim. "Many of the physicians, hospitals and clinics that provide vital health care to Missourians are often left waiting for payment from insurance companies months after those providers submit their claims."